Menu costs in relation to inflation refers to ?
Correct answer: B. Costs of altering price lists
- A. Costs of finding better rates of return
- B. Costs of altering price lists
- C. Costs of money increasing its value
- D. Costs of revaluing the currency
Explanation
Menu costs are the administrative and practical expenses firms incur when changing prices, such as reprinting catalogues, changing labels and updating price lists. They help explain why prices may remain sticky during inflation.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
According to the Phillips curve unemployment will return to the natural rate when ?
Permanent income is ?
Because people's income vary other the life cycle and because there are transitory shocks to people's incomes the standard measures of income distribution ?
An increase in costs will ?
An increase in injections into the economy may lead to ?
Demand pull inflation may be caused by ?